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Site Title: Strategic Management: Concepts and Cases, 12/e

Book Title: Strategic Management: Concepts and Cases, 12/e

Book Author: David

Location on Site:

Chapter 6 > Chapter Quiz

Date/Time Submitted:

February 4, 2011 at 5:57 PM (UTC/GMT)

Summary of Results

60% Correct of 20 Scored items:

12 Correct: 60%

8 Incorrect: 40%

5 questions not scored. 20 scored questions.

More information about scoring

1. The __________ is based on 2 key dimensions: the IFE total weighted scores on x-axis and the EFE total weighted scores on the y-axis.

Your Answer:

SPACE Matrix

Correct Answer:

IE Matrix

Incorrect. The correct answer is the IE Matrix.

2. _________ are defensive tactics directed at reducing internal weakness and avoiding external threats.

Your Answer:

WT Strategies

Correct.

3. Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies?

Your Answer:

The matching stage

Correct.

4. ______ have a low relative market share position and compete in a slow- or no-market-

http://wps.prenhall.com/bp_david_sm_12/87/22400/5734494.cw/index.html

growth industry.

Your Answer:

Dogs

Correct.

5. Which of these is not a SPACE Matrix quadrant?

Your Answer:

Offensive

Correct.

6. ______ organizations compete in slow-growth industries and have weak competitive positions.

Your Answer:

Quadrant III

Correct.

7. A division with a high relative market share position in a low-growth industry can be described as a:

Your Answer:

cash cow.

Correct.

8. Slow market growth characterizes ______ and ______ of the Grand Strategy Matrix.

Your Answer:

Quadrant I; Quadrant IV

Correct Answer:

Quadrant III; Quadrant IV

Incorrect. The correct answer is quadrant III and IV.

9. _____ is shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment.

Your Answer:

Equifinality

Correct Answer:

Generalization

Incorrect. The correct answer is generalization.

10.

Which of the following is not a tactic used by politicians for centuries that can aid strategists?

Your Answer:

Generalization

Correct Answer:

Objectivity

Incorrect. This is a tactic used by politicians that can aid strategists. The correct answer is objectivity.

11.

Sustainability is the idea that a business can meet its financial goals without hurting customers.

Your Answer:

True

Correct Answer:

False

Incorrect. Sustainability is the idea that a business can meet its financial goals without hurting the environment.

12.

Organizations generally will pursue ST, SO, or WT strategies to get into a situation in which they can apply WO strategies.

Your Answer:

False

Correct.

13.

FA and CA are the 2 dimensions with negative ratings in SPACE Matrix.

Your Answer:

False

Correct.

14.

The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.

Your Answer:

False

Correct Answer:

True

Incorrect. The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.

15.

The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain, and harvest or divest.

Your Answer:

True

Correct.

16.

Quadrant IV businesses compete in slow-growth industries and have weak competitive positions.

Your Answer:

True

Correct Answer:

False

Incorrect. Quadrant IV businesses have a strong competitive position but are in a slow-growth industry.

17.

The Grand Strategy Matrix is based on two evaluative dimensions: market share and market growth.

Your

False

Answer:

Correct.

18.

If the directional vector appears in the lower-right or competitive quadrant of the SPACE Matrix, it suggests competitive strategies such as backward, forward, and horizontal integration.

Your Answer:

True

Correct.

19.

The BCG Matrix graphically portrays differences among divisions in terms of relative market share position and industry growth rate.

Your Answer:

True

Correct.

20.

In the U.S. today, each board director attends at least 90 percent of all meetings.

Your Answer:

True

Correct Answer:

False

Incorrect. In the U.S. today, each board director attends at least 75 percent of all meetings.

21.

Describe the eight steps involved in constructing a SWOT Matrix. What strategies are derived from the development of a SWOT Matrix? How are they used?

Your Answer:

(blank)

22.

What is the BCG Matrix? What is its purpose and how does it help strategic managers?

Your Answer:

(blank)

23.

What is the role of the QSPM? Briefly describe how the QSPM is used.

Your Answer:

(blank)

24.

How do good corporate governance and strategy relate to one another? Identify some principles of good governance according to BusinessWeek.

Your Answer:

(blank)

25.

Describe the political tactics of successful strategists within large organizations. Identify some of these tactics specifically.

Your Answer:

(blank)




Book Author: David

Location on Site:




Summary of Results


7 Correct: 35%

13 Incorrect: 65%



1. Which of these is true about strategy implementation?

Your Answer:

It is positioning forces before the action.

Correct Answer:

It is primarily an operational process.

Incorrect. The correct answer is it is primarily an operational process.

2. In organizations that do not use a strategic-management approach to decision making, _________ is often based on political or personal factors.

Your Answer:

goal setting

Correct Answer:

resource allocation

Incorrect. The correct answer is resource allocation.

3. _______ can be defined as a disagreement between two or more parties on one or more issues.

Your Answer:

Avoidance

Correct Answer:

Conflict

Incorrect. The correct answer is conflict.

4. Perhaps the most important limitation of a divisional structure is that it:

Your Answer:

allows local control of situations.

Correct Answer:

is costly.

Incorrect. This is not a disadvantage of divisional structure. The correct answer is that it is costly.

5. The most widely used structure is the ________ type.

Your Answer:

divisional

Correct Answer:

functional

Incorrect. The correct answer is functional.

6. Which of the following is not one of the ways divisional structures can be organized?

Your Answer:

By geographic area

Correct Answer:

By suppliers

Incorrect. The correct answer is by suppliers.

7. A _____ structure leads to short-term and narrow thinking that may undermine what is best for the firm as a whole.

Your Answer:

divisional

Correct Answer:

functional

Incorrect. The correct answer is functional.

8. ________ is concerned more with employee and customer well-being than shareholder well-being.

Your Answer:

Restructuring

Correct Answer:

Reengineering

Incorrect. The correct answer is reengineering.

9. A change strategy that attempts to convince people the change is to their personal advantage is:

Your Answer:

rational.

Correct.

10.

_______ can thrust managers into roles that emphasize counseling and coaching over directing and enforcing.

Your Answer:

Cross-training

Correct.

11.

Strategy implementation is managing forces during the action.

Your Answer:

True

Correct.

12.

Nothing could be more detrimental to strategic management and organizational success than for resources to be allocated inconsistent with priorities indicated by annual objectives.

Your Answer:

True

Correct.

13.

Defusion is exemplified by exchanging members of conflicting parties so that each can gain

an appreciation of the other's point of view.

Your Answer:

True

Correct Answer:

False

Incorrect. Defusion can include playing down differences between conflicting parties while accentuating similarities and common interests, compromising so that there is neither a clear winner nor loser, resorting to majority rule, appealing to a higher authority, or redesigning present positions.

14.

The structural format for developing objectives and policies can significantly impact all other strategy-implementation activities.

Your Answer:

True

Correct.

15.

Functional structure design violates the unity-of- command principle.

Your Answer:

True

Correct Answer:

False

Incorrect. Matrix structure design violates the unity- of-command principle.

16.

Defusion includes such actions as ignoring the problem in hopes the conflict will resolve itself or physically separating the conflicting individuals.

Your Answer:

True

Correct Answer:

False

Incorrect. Avoidance includes such actions as ignoring the problem in hopes the conflict will resolve itself or physically separating the conflicting individuals.

17.

Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an SBU (strategic business unit) or matrix structure.

Your Answer:

True

Correct.

18.

Communication is often the best in a functional structure.

Your Answer:

True

Correct Answer:

False

Incorrect. Communication is often not as good in a functional structure.

19.

The educative change strategy presents information to convince people of the need to change.

Your Answer:

True

Correct.

20.

There is a much higher tolerance for adversarial relations or friction at work in Mexico as compared to the United States.

Your Answer:

True

Correct Answer:

False

Incorrect. There is a much lower tolerance for adversarial relations or friction at work in Mexico as compared to the United States.

21.

Contrast strategy formulation and strategy implementation. Provide specific examples of how they differ.

Your Answer:

(blank)

22.

What is the purpose of annual objectives? Why are they essential to strategy implementation?

Your Answer:

(blank)

23.

Why is resource allocation so important? How are strategy, structure, and resources related?

Your Answer:

(blank)

24.

What is the matrix structure? When is it appropriate to use this type of organizational structure?

Your Answer:

(blank)

25.

What are some reasons for resistance to change? How can this threaten successful strategic implementation?

Your Answer:

(blank)




Book Author: David

Location on Site:




Summary of Results


7 Correct: 35%

13 Incorrect: 65%



1. ______ can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits.

Your Answer:

(blank)

2. ______________ and ____________ rank as marketing's most important contributions to strategic management.

Your Answer:

(blank)

3. An effective product positioning strategy leads customers to expect __________service than a company can deliver.

Your Answer:

(blank)

4. _______ entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry.

Your Answer:

(blank)

5. What is the most widely used technique for determining the best combination of debt and stock?

Your Answer:

Earnings per share/earnings before interest and tax analysis

Correct.

6. Nearly all financial institutions require at least __________ years of projected financial statements whenever a business seeks capital.

Your Answer:

five

Correct Answer:

three

Incorrect. The correct answer is three.

7. The first approach in evaluating the worth of a business is determining its __________ or __________.

Your Answer:

net income; operating revenue

Correct Answer:

net worth; stockholders' equity

Incorrect. The correct answer is net worth; stockholders' equity.

8. Which of the following can be forecasted using the percentage-of-sales method?

Your Answer:

Cost of good sold

Correct.

9. In many firms, _________ is doing away with the workplace and allowing employees to work at home or anywhere, anytime.

Your Answer:

management

Correct Answer:

information technology

Incorrect. The correct answer is information technology.

10.

The level of management support for R&D is often constrained by:

Your Answer:

the limited performance of R&D.

Correct Answer:

resource availability.

Incorrect. The correct answer is resource availability.

11.

The most common bases for segmenting markets are geographic and demographic.

Your Answer:

True

Correct.

12.

An EPS/EBIT analysis is the most widely used technique for determining whether debt, stock, or a combination is the best alternative for raising capital to implement strategies.

Your Answer:

True

Correct.

13.

The balance sheet should be prepared before the income statement in performing projected financial analyses.

Your Answer:

True

Correct Answer:

False

Incorrect. The projected income statement should be prepared before the balance sheet.

14 Financial budgets can be viewed as the planned allocation of a firm's resources based on

. past performance.

Your Answer:

True

Correct Answer:

False

Incorrect. Financial budgets can be viewed as the planned allocation of a firm's resources based on forecasts of the future.

15.

Strategies such as forward, backward, and horizontal integration require that new products be successfully developed and that old products be significantly improved.

Your Answer:

True

Correct Answer:

False

Incorrect. Strategies such as product development, market penetration, and related diversification require that new products be successfully developed and that old products be significantly improved.

16.

Using all debt or all stock to raise capital may impose fixed obligations, restrictive covenants, or other constraints that could severely reduce a firm's ability to raise additional capital in the future.

Your Answer:

True

Correct.

17.

Financial budgeting should not be thought of as a tool for limiting expenditures but rather as a method for obtaining the most productive and profitable use of an organization's resources.

Your Answer:

True

Correct.

18.

To use the price-earnings ratio method, divide annual earnings per share by the market price of the firm's common stock and multiply by average net income for the past five

years.

Your Answer:

True

Correct Answer:

False

Incorrect. To use the price-earnings ratio method, divide annual earnings per share by the market price of the firm's common stock and multiply by average net income for the past five years.

19.

A good information system can cause a firm to increase costs due to the expense of new technology.

Your Answer:

True

Correct Answer:

False

Incorrect. A good information system can cause a firm to reduce costs.

20.

A good information system can allow a firm to reduce costs by establishing direct communications between elements of the value chain.

Your Answer:

True

Correct.

21.

What are some marketing decisions that may require actual policies? Provide some examples.

Your Answer:

(blank)

22.

What specific steps are required in product positioning?

Your Answer:

(blank)

23.

Describe projected financial statement analysis. How is it used for strategy implementation?

Your Answer:

(blank)

24.

What methods are involved in evaluating a business's worth? Briefly describe each.

Your Answer:

(blank)

25.

What is a management information system? How are these systems becoming more important?

Your Answer:

(blank)




Book Author: David

Location on Site:




Summary of Results


6 Correct: 30%

14 Incorrect: 70%



1. __________ refers to the need for strategists to examine sets of trends as well as individual trends in evaluation strategies.

Your Answer:

Consistency

Correct Answer:

Consonance

Incorrect. The correct answer is consonance.

2. Strategy evaluation includes all of the following basic activities, EXCEPT:

Your Answer:

Examining the underlying bases of a firm's strategy.

Correct Answer:

Comparing results of competitors' strategies.

Incorrect. The correct answer is comparing results of competitors' strategies.

3. The purpose of strategy evaluation is to:

Your Answer:

improve R&D programs.

Correct Answer:

alert management to problems or potential problems.

Incorrect. The correct answer is to alert management to problems or potential problems.

4. ______ require a more elaborate and detailed strategy evaluation system.

Your Answer:

Small organizations

Correct Answer:

Large organizations

Incorrect. The correct response is large organizations.

5. A revised _________ matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats.

Your Answer:

IFE

Correct Answer:

EFE

Incorrect. The correct answer is EFE.

6. _______ should place an organization in a better position to capitalize upon internal strengths; to take advantage of key external opportunities; to avoid, reduce, or mitigate external threats; and to improve internal weaknesses.

Your Answer:

Corrective actions

Correct.

7. Which of these is not a key financial ratio?

Your Answer:

Market share

Correct Answer:

Production quality

Incorrect. This is a key financial ratio. The correct answer is production quality.

8. Which of the following is not a qualitative question that is useful in strategy evaluation?

Your Answer:

How much has our market share grown?

Correct.

9. _______ can be defined as alternative plans that can be put into effect if certain key events do not occur as expected.

Your Answer:

Strategy formulation

Correct Answer:

Contingency plans

Incorrect. The correct answer is contingency plans.

10.

The Balanced Scorecard approach to strategy evaluation aims to:

Your Answer:

emphasize long-term concerns.

Correct Answer:

balance internal with external concerns.

Incorrect. The correct answer is balance internal with external concerns.

11.

Advantage, in Rumelt's criteria for evaluating strategies, means a strategy must neither overtax available resources nor create unsolvable subproblems.

Your Answer:

True

Correct Answer:

False

Incorrect. This represents feasibility.

12.

Alternative strategies not selected for implementation should be discarded, as they have a tendency to contaminate the contingency plans.

Your Answer:

True

Correct Answer:

False

Incorrect. Alternative strategies not selected should not be discarded because they serve as contingency plans in case the strategy or strategies selected do not work.

13.

And IFE Matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats.

Your Answer:

True

Correct Answer:

False

Incorrect. A revised EFE Matrix should indicate this.

14.

The end of the fiscal year is the best time of the year to do strategy evaluation.

Your Answer:

True

Correct Answer:

False

Incorrect. It should be performed on a continuous basis.

15.

Criteria that predict results may be more important than those that reveal what already has happened.

Your Answer:

True

Correct.

16.

Strategy evaluation, to be effective, should be based on quantitative criteria only.

Your Answer:

True

Correct Answer:

False

Incorrect.

17.

Instituting an environmental audit can include moving environmental affairs from the staff side of the organization to the line side.

Your Answer:

True

Correct.

18.

Auditor-employees within an organization are responsible for safeguarding company assets, assessing the efficiency of company operations, and ensuring that generally accepted business procedures are practiced.

Your Answer:

True

Correct.

19.

Proponents of the top-down approach contend that top executives are the only persons in the firm with the collective experience, acumen, and fiduciary responsibility to make key strategy decisions.

Your Answer:

True

Correct.

20.

Strategy evaluation is becoming easier with the passage of time.

Your Answer:

True

Correct Answer:

False

Incorrect. Strategy evaluation is becoming increasingly difficult with the passage of time.

21.

Identify and describe Rumelt's criteria for evaluating strategies.

Your Answer:

(blank)

22.

What are some key questions to address in evaluating strategies?

Your Answer:

(blank)

23.

How is the Balanced Scorecard used as a strategy-evaluation tool? Support your response.

Your Answer:

(blank)

24.

What are the characteristics of an effective evaluation system?

Your Answer:

(blank)

25.

What is the purpose of contingency planning? What are some common contingency plans? Provide at least two examples.

Your Answer:

(blank)

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